Foxconn Considering Chinese Exit, Reports Say

The furore surrounding the controversial manufacturing giant Foxconn took another twist this week, after reports suggested that the Taiwanese company is considering closing its mainland Chinese operations.

Foxconn makes products for a number of tech companies including the likes of Dell, HP, and of course Apple. For weeks now controversy has dogged the Chinese plant over the high number of suicides among its workforce, amid reports of brutal working conditions. Companies such as Apple, Nokia and Dell said they were conducting investigations to ensure that conditions at the plants are healthy.

Executives at Foxconn had agreed to raise the wages of its workers by 20 percent, and Steve Jobs himself was drawn into the controversy, insisting that Foxconn does not run a sweatshop.

Going Home?

But now it seems that Foxconn is looking to undertake a massive restructuring, that could see 800,000 workers lose their jobs, as the company considers moving its production back to Taiwan.

According to the Register, the news emerged on the Chinese-language news site ON.CC. (Google translation available is available here). However, it is worth noting that this report has not been verified at time of writing.

Compensation Halt

Meanwhile Foxconn has also said it will no longer pay extra compensation to families of employees who kill themselves. It said it will ease condolence payments of 100,000 yuan (£10,000) and instead will only provide the officially stipulated amount of one tenth of that amount.

It seems that officials at Foxconn are suspious that the compensation payouts may have been a contributing factor in the suicides. According to the Times newspaper, at the annual shareholder meeting in Taiwan this week, Foxconn chairman Terry Gou displayed a handwritten letter from a worker to his parents.

“Now I am going to jump from Foxconn,” he wrote. “You don’t need to be broken-hearted, because Foxconn will pay some money in compensation. This is the only way your son can repay you.”

Another report cited Foxconn CEO Guo Tai-ming as saying that workers commit suicide for the money.